Successful first half-year for Jungheinrich
Jungheinrich reports a successful first half of the 2023 financial year with very good sales growth and strong earnings despite the ongoing difficult market situation.
- Incoming orders: 2,684 million euros (+9 per cent)
- Revenue: 2,658 million euros (+21 per cent)
- EBIT: 236 million euros (+46 per cent)
- EBIT ROS: 8.9 per cent (previous year: 7.4 per cent)
- Acquisition of Storage Solutions Group included in the consolidated financial statements for the first time
- Forecast for 2023 confirmed
Hamburg - Jungheinrich AG is looking back on a very successful first half of the 2023 financial year. Despite persistently difficult market conditions – due in particular to the weak economic development in the eurozone – the Group recorded a steady growth in incoming orders of 9 per cent to 2,684 million euros (previous year: 2,461 million euros). Incoming orders attributable to the acquisition of Storage Solutions completed on 15 March amount to 89 million euros. Orders on hand from new business came to 1,731 million euros at the end of the first half of 2023 and take into account the orders on hand from the Storage Solutions Group of 145 million euros. In comparison with the orders on hand of 1,595 million euros at the end of 2022, this represents an increase of 136 million euros or 9 per cent. Group revenue of 2,658 million euros in the first half of 2023 was 21 per cent higher than in the same period of the previous year (2,202 million euros). This growth was mainly driven by the new business. In addition to the positive growth in new trucks, the revenue from Storage Solutions Group in the amount of 69 million euros accounted for under new business also contributed to this performance. EBIT increased significantly in the first six months of 2023 by 74 million euros, or 46 per cent, to 236 million euros (previous year: 162 million euros). The contribution to operating earnings from the Storage Solutions Group included in this figure amounted to 12 million euros. Taking into account the one-off costs related to the transaction, the purchase price allocation and the variable remuneration components totalling 19 million euros in the first half of 2023, the Storage Solutions Group made a net contribution to EBIT of –7 million euros in total. At 8.9 per cent, Jungheinrich’s EBIT return on sales (EBIT ROS) was significantly higher than in the first half of the previous year (7.4 per cent).
“The first half of the year was very successful for Jungheinrich. Our recent strong revenue growth continued. With an increase of 46 per cent, we once again recorded a very positive development in terms of earnings. Through the acquisition of the Storage Solutions Group, we gained an important platform for growth in the area of racking systems and warehouse automation in the USA. That is now reflected for the first time in our consolidated financial statements. We continue to press ahead with the implementation of our Strategy 2025+ and confirm our forecast for the current year. Jungheinrich is very well positioned for the future,” explains Dr Lars Brzoska, Chairman of the Board of Management of Jungheinrich AG.
At 222 million euros, EBT in the first half of the year significantly exceeded the previous year’s figure (138 million euros) by 61 per cent. EBT return on sales (EBT ROS) came to 8.3 per cent (previous year: 6.3 per cent). Profit or loss amounted to 163 million euros (previous year: 103 million euros). Earnings per preferred share were 1.61 euros (previous year: 1.02 euros). ROCE rose markedly to 18.2 per cent (previous year: 14.4 per cent). The reason for this was the considerable increase in EBIT in the "Intralogistics" segment in comparison with the previous year. The increase in the average capital employed was disproportionately less in comparison. This was primarily due to the increase in working capital in the third and fourth quarters of 2022, while working capital was comparatively stable in the first and second quarters of 2023 due to targeted working capital management. Free cash flow, the sum of cash flow from operating activities and investing activities, improved markedly to –182 million euros (previous year: –270 million euros). Without the acquisition of the Storage Solutions Group, the operating business would have generated a positive free cash flow.
Jungheinrich’s main research and development (R&D) activities in the first half of 2023 focussed on the further development of efficient lithium-ion technology-based energy storage systems, the associated improvements in terms of constructing new material handling equipment and digital products. In addition, the development of mobile robots and the optimisation of automated systems were another development focus. Total R&D expenditure, which primarily consisted of internal services, increased by 11 million euros to 72 million euros in the first half of 2023 (previous year: 61 million euros). The increase in important product development work meant that the capitalisation ratio rose considerably to 31 per cent in comparison with the previous year (21 per cent).
Jungheinrich employed a total of 20,445 people on a full-time basis throughout the Group as of 30 June 2023, of whom 41 per cent worked in Germany and 59 per cent abroad. That represents a total of 638 employees or 3 per cent more than on 31 December 2022 (19,807). In addition to the expansion of personnel in Sales, the changes in the reporting period compared with the end of December resulted from the acquisition in the USA (Storage Solutions) with 176 employees.
Forecast
The Board of Management confirms its forecast from 24 April 2023 for the current financial year. This forecast includes the proportionate effects from the acquisition of US company Storage Solutions Group, which was completed on 15 March 2023. The recognised values are subject to exchange rate fluctuations.
Jungheinrich expects incoming orders of between 5.0 billion euros and 5.4 billion euros for the whole of 2023 (2022: 4.8 billion euros). Group revenue is forecast to be within a range of 5.1 billion euros to 5.5 billion euros (2022: 4.8 billion euros). This range takes into account incoming orders of 0.3 billion and revenue of 0.2 billion euros from the Storage Solutions Group.
We estimate that EBIT will amount to between 400 million euros and 450 million euros in 2023 (2022: 386 million euros). This includes one-off transaction-related costs amounting to approximately 8 million euros resulting from the acquisition of the Storage Solutions Group and – after the final purchase price adjustment and completed purchase price allocation – negative effects amounting to 13 million euros. The EBIT range also takes into account around half of the variable, performance-related remuneration components for the management of the Storage Solutions Group amounting to 15 million euros, which was calculated according to the conditions set out as part of the transaction. The negative effects will be partially offset by the pro rata operating result of Storage Solutions in the amount of 25 million euros to 30 million euros. EBIT ROS is expected to range between 7.8 per cent and 8.6 per cent (2022: 8.1 per cent). EBT is expected to reach 370 million euros to 420 million euros (2022: 347 million euros), corresponding to an EBT ROS of between 7.2 per cent and 8.0 per cent (2022: 7.3 per cent). Jungheinrich is anticipating ROCE between 15 per cent and 18 per cent (2022: 16.3 per cent).
Furthermore, Jungheinrich expects that free cash flow will see a marked improvement on the previous year (–239 million euros) but will still remain negative due to the acquisition of Storage Solutions. The free cash flow forecast includes 307 million euros in accordance with the final purchase price adjustment agreed contractually with the close of the acquisition. A portion of the purchase price was used to repay bank liabilities and is therefore not considered part of the free cash flow. Disregarding the acquisition, Jungheinrich expects the operating business to generate a positive free cash flow.
